The Indian government needs to reform non-ferrous metals customs duty and introduce subsidies and tax credits to boost metal scrap supply and recycling initiatives, the Material Recycling Association of India conference in Kolkata was told Jan. 24.
MRAI President Sanjay Mehta said the government should waive non-ferrous import duties to boost supply, to match the duty waiver for ferrous scrap imports, which was implemented in February 2021, and has since been extended twice.
"The European Union is looking to ban scrap exports from Jan. 1, 2026, or by the end of 2026, to India and non-OECD countries, and those we speak to are saying you still have duties in India on imports of non-ferrous scrap. You have to remove the duties first before you can go to the EU to say we are reliant on you [for scrap supply]," Mehta said in his opening address.
Mehta was referring to the EU's proposed Waste Shipment Regulation awaiting endorsement by member states in the European Council before it can be formally adopted. It could restrict scrap exports to non-OECD countries such as India, should processing standards not be considered equivalent to EU standards.
India's import duty for aluminum scrap is 2.5%, which scrap traders and secondary aluminum producers want cut.
Against that, the Aluminum Association of India, which represents primary smelters, called in November for the government to increase the customs duty on imports of aluminum scrap to 10%, citing an unspecified 24% rise in imports.
Ministry of commerce import data, however, showed HS code 7602 aluminum scrap import volumes totaled 1.67 million mt over January-November 2023, up 5.4% year on year.
"I do not expect any change in the aluminum scrap import duty in the upcoming budget [on Feb. 1], because it is a long-term battle and primary smelters have been lobbying the government for a long-time because secondary ingot production is eating into the primary market share," one secondary producer said on the sidelines of the conference.
Energy transition opportunities
Dhaval Shah, partner at Metco Ventures, a non-ferrous scrap trading house, called for the government to consider new policy interventions develop an ecosystem to recycle solar panels, estimating that by 2035, India alone will have about 200,000 mt of solar photo-voltaic panel waste, assuming an average 20-year solar panel lifespan in India.
"In the last 9-10 years, the penetration of solar power has grown 30 times and prominent new capacities are being added, we will need a new ecosystem and infrastructure in place to collect, receive, process and recover these end of life solar photo-voltaic panels," Shah said.
About 95% of all solar panels in use in India are crystalline silicon solar panels, which contain about 12.8% of 6000 series aluminum alloy, and 4% silicon, which India does not produce domestically, Shah said.
Platts last assessed 553 grade silicon metal at Eur2,550/mt ($2,780/mt) IW Europe, duty paid on Jan. 17, down from Eur2,700/mt at the end of 2023.
The relatively low metal content in the panels could create a regulatory hurdle, Shah said.
"The Indian ministries and BIS [Bureau of Indian Standards] are looking at creating standards for scrap handling, which essentially means that materials with low concentrations of metals will be rendered not usable or that we cannot trade or process these materials," Shah said.
"It is not only the PV panels, but we would not be able to handle other materials like cables, used foils and used beverage cans. We in India have to learn and capitalize on the mistakes that other countries have previously made."
Surendra Patawari, president of Belgian-based scrap trading house Gemini Corp., also called for the government to introduce subsidies and tax credits similar to the US Inflation Reduction Act in order to boost the domestic recycling infrastructure investment, ahead of expected growth in electric vehicle demand.